Opec threat ignored

Speculation that Opec will cut oil production when it meets next week failed to halt the slide in prices yesterday.

The cartel's secretary general, Ali Rodriguez, speaking at an industry conference in Kuala Lumpur, admitted that it might make cuts in output of more than 1m barrels a day to prop up prices, when it meets on November 14.

But Brent crude fell 40 cents to $19.37 per barrel, just above last week's two-year lows and well below Opec's target of $22-$28 a barrel.

"Opec is facing several problems: the economic downturn, oversupply and high stocks not only for oil but also products, which has had a negative impact on price," Mr Rodriguez said. "The other problem that Opec faces is war." Iraq, Venezuela and Qatar have recently called for a 1m bpd production cut.

Analysts warned that cuts in output were unlikely to shore up prices, with non-Opec members such as Russia, Mexico and Angola expected to continue pumping at full capacity, and economic downturn in the US depressing demand. "As long as demand is falling, cuts in Opec supply will be like a dog chasing its own tail," said Nauman Barakat of ABN-Amro.